Our bankruptcy clients usually come to us ashamed and tired. They are ashamed because they think they never took on debt thinking they would not be able to pay it back. They’re tired because they’ve done everything they can to pay back their debt. The first thing we do is explain to them that there is nothing wrong or shameful about filing.
Here is the thing the credit card companies and banks do not want you to know – the system is set up for you to fail. They charge unconscionable interest rates, late fees, collection fees, and enforce acceleration clauses in an attempt to get you to give them large sums of money. Money you need to pay for groceries or rent. Many times, bankruptcy is the only option because the system designed to make it difficult to climb out of a hole of debt.What Does an “Average” Bankruptcy Look Like?
Each bankruptcy is different. They are as different as the people who are filing for bankruptcy relief. However, the steps to a case usually follow a similar trajectory.
First, the debtor decides that they want to file for bankruptcy. They will meet with our office and we will help them decide whether a Chapter 7 or a Chapter 13 is right for them. Which Chapter is dependent on how much income they have made in the past six months. Chapter 7 and Chapter 13 are discussed elsewhere on our website.
The client will then need to compile a lot of documents. Generally, this will include two years of taxes, copies of their social security card, current expenses, current income, six months’ worth of paystubs, credit card statements, deeds, mortgage statements, and potentially a credit report.
Once we have all those documents, the attorney will put together a Bankruptcy Petition, which will include several “Schedules” that give information about the client to the Court and Bankruptcy Trustee.
Prior to filing, the client will also need to complete a “Credit Counseling” course regarding their current financial state of affairs. This is a low cost course hosted by an organization that is certified and recognized by the Bankruptcy Court.After Filing and the Section 341 Hearing
Once the case is filed, the court appoints a Bankruptcy Trustee. The trustee is an experienced bankruptcy attorney contracted by the Bankruptcy Court to make sure the debtor is following all the rules and disclosing everything they are supposed to disclose. Upon filing, the court will schedule a Section 341 or “Meeting of the Creditors”.
Prior to the Section 341 hearing, the debtor’s attorney will send pay stubs and tax filings to the trustee. The debtor will also need to complete a second, “Financial Management” course through a low cost vendor.
The Section 341 hearing will generally take place around 45 days from the filing. Any of the creditors listed on the Petition are invited to attend. At the meeting, the trustee will ask questions of the debtor, under oath, and any creditors will have an opportunity to ask questions.After the Creditor’s Hearing
After the “Meeting of the Creditors,” the trustee may ask for some follow up documents or order that the petition be amended. The debtor’s failure to comply may be grounds to deny the petition. Assuming the trustee does not take issue with the petition, they will ask to be relieved from the case.
Any creditors who want to object to their debt being discharged, usually have 60 days from the meeting to file an objection. Common grounds for objecting to a discharge might be fraud in acquiring the debt, willful and malicious conduct, or intentional falsities in the petition. These objections are usually filed in what is known as an Adversary Complaint.
If a creditor and the trustee do not object to discharge, the debtor will then receive a order from the court discharging their debt or approving the payment plan, if the debtor filed a Chapter 13.At Marcotte Law Firm We Can Help Lead You Through the Bankruptcy Process
Our attorneys are experienced in the Bankruptcy process. Give us a call today for a free consultation, (978) 458 – 1229.